Article written by Adam

4 responses to “AIG and General Re Fraud”

  1. Notes on the Bank Bailout Bill, Economy & Other News

    […] I’ve written about on my personal blog, AIG is a corrupt corporation. Congress is now looking into AIG’s part in the the global credit crisis. It truly boggles […]

  2. Apex

    flash forward 2 years and these guys just cant stop getting themselves into trouble can they?

    Apex Professionals´s last blog post..Apex Professionals LLC: Why get out of your timeshare?

  3. Adam Pieniazek

    It’s funny Apex, I picked the AIG & Gen Re fraud case for this accounting paper because I was very intrigued by how they committed fraud. They basically counted premiums as profit instead of liability. It shows a clear disconnect from standard accounting standards that should have raised lots of red flags and put them on a strict watch by the regulatory authorities. Instead the regulatory authorities trusted AIG and even continue to do so in the face of overwhelming evidence that they are not a trustworthy institution.

  4. Apex Professionals

    Sorry it took me a while to get back to ya. Anyway yeah, pretty unscrupulous bunch. I was reading somewhere not too long ago that the current AIG issue, and some of the other banks looking for a bailout is vastly inflated. Basically a bunch of different banks do this thing where they basically insured the debt on properties. So when people defaulted they took a huge hit… but the thing is a lot of this supposed “debt” that AIG and other banks have is essentially a round-robin between banks. Also since often more than one bank would insure the debt on a property, when it defaults the supposed loss the banks take is often cumulatively more than the actual cost of the property that defaulted. Its a pretty complex system and I don’t pretend to understand it entirely.. but it sounds pretty scam-tastic to me. Thanks for responding to my comment!